Global accounting rules could cost plenty
U.S. companies could end up spending tens of millions each to comply with new international accounting rules, sources said.
The Securities and Exchange Commission said about 110 companies eligible for an early start using International Finance Reporting Standards could spend $32 million each to train staff and upgrade technology, USA Today reported Tuesday.
United Technologies comptroller Margaret Smyth said the company spent several million in a two-year effort to switch to international standards.
Some believe economic globalization makes the switch from Generally Accepted Accounting Principals to IFRS rules in inevitable.
If companies don’t prepare “¦ they’re going to be in big trouble, said Donna Streetat at the University of Dayton.
The International Accounting Standards Board and the Financial Accounting Standards Board have been pushing U.S. companies to move toward international accounting rules, which are used by the European Union and 113 nations, the newspaper said.
The SEC has issued a
road map that points to a possible regulatory switch by 2014.
Some have warned the switch is more than a headache.
It has a potential to be a Tower of Babel, said Charles Niemeier, a member of the Public Company Accounting Oversight Board.